Ship from store programmes are growing in popularity, thanks to their ability to offer flexibility and speed to the retailer. With the benefits of reduced shipping times and improved stock optimisation, there seems little reason not to implement a ship from store programme. Yet the reality is that it is easy to get it wrong, which can result in frantic store staff, late home deliveries and disgruntled consumers. With this in mind, Eric Fergusson, head of retail services at eCommera, gives five examples of the mistakes to avoid when implementing a ship from store programme.
1. Don’t route online orders to busy stores
When the store gets busy, staff may not know whether to prioritise online orders or the customers in store. A likely result of this is that in-store customers will be neglected and online orders will miss their fulfilment SLA, meaning unhappy customers all round.
Do… Plan for peaks. Although this may mean suspending your ship from store programme during busy periods, it will make everything more manageable and allow staff to concentrate wholly on one thing at a time. An alternative option to help plan for peak times is to bring in additional staff to support the programme during busy periods such as the Christmas holidays.
2. Don’t assume that all stores should have the same cut-off times as the warehouse
All stores will be different based on size, efficiency and location. Depending on these factors, some will be better at handling online orders than others.
Do… Consider each store carefully and decide upon a cut-off time based on key factors such as staffing levels, opening and closing times, and scheduled pick-ups. Stores with later opening hours can present an opportunity to extend the cut-off time for next-day delivery, which can improve customer satisfaction.
3. Don’t expect to get your routing rules right first time
There are many factors to consider when creating rules for deciding where to ship an order from, such as proximity to delivery address, stock availability and store fulfilment track record. With the complexity involved, very few, if any, retailers get this right the first time.
Do… Ensure that you have the right KPIs and review intervals so you can track and refine as you go. Be sure to have a clear goal in mind. For example, if your goal is to minimise mark-down and cost of movement in a region, then prioritise stores with the poorest sell-through to date and factor in performance metrics such as store success rate at fulfilling from store. However, if delivery speed is an issue, than proximity and availability will be more important.
4. Don’t run ship from store without an up-to-date view of available stock
Without a real-time view, you put yourself at risk of running out of stock and ultimately then having to cancel orders. Many retailers surface stock using daily batch updates, but during peaks and with highly sought after items, this isn’t always ideal.
Do… Invest in gaining a single view of real-time stock. This is key to optimising stock allocation, as not only can you decide where to ship an order from, but you can also reallocate the stock that is slow moving in some locations to those locations where order velocity is higher. Good order management systems can be implemented in as little as three months and won’t require replacing existing systems.
5. Don’t measure the wrong things
Avoid focusing solely on outputs, for example the number of orders shipped from store or the percentage of stock sold at full margin. While targets are useful, the key is to focus on the things that you can affect with the end goal of continual optimisation.
Do… Tie back the programme KPIs to the three core metrics of retained revenue, operational satisfaction from shipment and delivery on customer promise, and sale at full price through gross margin return on capital. Within this, retailers should focus on things like the number of orders fulfilled from each store, store performance and number of orders rejected by the store, together with the reasons.
Ship from store doesn’t have to be complicated, but failure to get it right can result in a lot of problems for in-store and online staff. Knowing what not to do when it comes to ship from store, puts you in good stead to start putting in place the strategy and initiatives that ensure every customer experience is a good one and every order is a profitable one.